Schumer bills aid farmers

Dairy industry gets lift from yogurt production

Published 9:13 pm, Thursday, March 7, 2013

Photo: Philip Kamrass

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View of a display of FAGE and Chobani Greek yogurts, both products of New York State, at the Hannaford store in Latham Farms on Thursday June 9, 2011 in Latham, NY. FAGE is made in Johnstown. ( Philip Kamrass / Times Union) less

View of a display of FAGE and Chobani Greek yogurts, both products of New York State, at the Hannaford store in Latham Farms on Thursday June 9, 2011 in Latham, NY. FAGE is made in Johnstown. ( Philip Kamrass ... more

Photo: Philip Kamrass

Schumer bills aid farmers

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ALBANY — To cash in on growing demand for Greek yogurt and to aid dairy farmers across the state and nation, U.S. Sen. Chuck Schumer introduced two bills on Thursday aimed at helping farmers save money and expand.

The bills, co-sponsored by Idaho Republican Sen. Mike Crapo, would create federal tax-deferred farm savings accounts that would encourage farmers to save during business booms to ride out dips in the milk market and would also ease the tax burden on expanding dairy farms by allowing them to write off the purchase of some cows. Thanks to a spike in Greek-style yogurt popularity, yogurt production has become one of the fastest growing industries in the state. Upstate New York is home to producers Chobani in Chenango County and Fage in Fulton County.

The number of yogurt processing plants more than doubled to 29 in 2012 from 14 in 2000, and Alpina, a South American food producer, and snack and soft drink company PepsiCo both have plants under construction in western New York.

Greek yogurt takes three times the amount of milk that regular yogurt requires, and dairy farmers are struggling to keep up with demand.

The New York Farm Bureau has said dairy farmers would have to increase their milk output by 15 percent to meet the demands of the industry.

Milk producers face obstacles from a volatile milk market to regulatory costs and a lack of capital.

"If we can't provide what the yogurt plants need then they will go elsewhere for what they need," said Farm Bureau spokesman Steve Ammerman.

The farm savings accounts allow farmers to put aside money in flush times and withdraw it when needed, deferring taxes that would be calculated on the marginal rate at the time of withdrawal, similar to retirement savings accounts.

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Additionally, farmers could utilize bonus depreciation on livestock purchases, allowing a large portion of the tax deduction to be taken when the animal is first purchased, making expanding their operations less costly.

Jim Davenport, owner of Tollgate Holsteins dairy farm in Ancramdale, Columbia County, said the farm savings account would be a boon to dairy farmers – especially in a fickle market.

Davenport's 64-cow farm produces 1.8 million pounds of milk a year and is a member of Hudson Valley Fresh, a nine-farm dairy cooperative that began producing yogurt last year.

"The way the business is, it's hard to imagine we'll ever have two good years in a row," said Davenport. "Invariably, you're going to have that bad year. This would allow you to get through it."